ONDC Explained: Open Network Set To Transform E-Commerce

The Open Network for Digital Commerce (ONDC) is not an app or a marketplace. It’s a public network — a tech protocol—connecting sellers, buyers, and service providers seamlessly.

Let’s break down what ONDC is, why it matters, and how it could reshape digital commerce for everyone.

Not a Platform But a Network

ONDC functions like Bluetooth but for online commerce. Different apps and services can now interact on a shared network.

This means that sellers and buyers no longer need to be on the same app to do business. A user could browse on one platform and buy from another, smoothly.

Why Does India Need ONDC?

India has over 12 million sellers. Yet, only 15,000 have access to e-commerce. That’s just 0.125%.
E-retail is limited to big cities, leaving out most small businesses.

ONDC aims to change this by making e-commerce inclusive. The goal is to increase the current 4.3% e-retail penetration to national scale — especially in rural and small-town India.

Inspired by India’s Digital Public Infrastructure

India has led the way in creating open digital systems. UPI revolutionized payments. Aadhaar redefined identity. Now, ONDC wants to do the same for e-commerce.

Launched by the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC is built on open-source protocols and aims to break platform monopolies.

Who Can Join The Network?

ONDC recognizes four key roles:

• Buyer Network Participants – Apps and tools that buyers use to place orders
• Seller Network Participants – Platforms that help sellers list and manage products
• Technology Service Providers – Offer tools like inventory, payments, or delivery
• Gateways – Enable discovery and connection between buyers and sellers

Everyone can plug in. No single platform controls the whole transaction.

How Does It Work?

It’s based on microservices and APIs. Buyer apps interact with customers. Seller apps manage product listings and orders. Gateways help them discover each other.

The ONDC network is not centralized. It’s modular, allowing any platform to join and transact.

Where Is ONDC Active?

ONDC began pilot programs in Bengaluru, Delhi NCR, Mumbai, Pune, and other cities.
Since launch, it has handled over 7.64 lakh orders and now supports over 370,000 sellers across 616 cities.

Startups like Magicpin and giants like Flipkart, Paytm, PhonePe, and Amazon have integrated with ONDC.

Why It Matters for Small Businesses?

ONDC offers a major benefit in sectors like food delivery. Today, platforms charge restaurants up to 25% in commissions.

With the Open Network, small vendors can keep more profits and gain visibility without paying high platform fees.

A New Era for Digital Commerce

ONDC could redefine how India shops, sells, and scales digitally. By opening access, lowering costs, and promoting interoperability, the network promises a more inclusive future for all.